Frontline Plc · NYSE:FRO
Frontline — Pareto Conference September 2022
19 slides from Frontline's conference presentation, September 2022
Slide 1: Pareto Conference September 2022
Pareto Conference September 2022
Slide 2: Forward Looking Statements
Forward Looking Statements MATTERS DISCUSSED IN THIS DOCUMENT MAY CONSTITUTE FORWARD-LOOKING STATEMENTS. THE PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995 PROVIDES SAFE HARBOR PROTECTIONS FOR FORWARD-LOOKING STATEMENTS IN ORDER TO ENCOURAGE COMPANIES TO PROVIDE PROSPECTIVE INFORMATION ABOUT THEIR
Slide 3: Shipping Powerhouse
Shipping Powerhouse A diversified operation within marine and energy industries • Aligned Corporate Governance framework • Economies of scale through shared technical management, bunker procurement and administrative services • Strong synergies achieved by knowledge shared on operating and managing
Slide 4: Highlights from FRO Q2 report
Highlights from FRO Q2 report Q2 2022 Q3 2022 est. % done VLCC $16,400 $28,100 73% Suezmax $26,500 $45,000 73% $38,600 $46,200 62% LR2 / Aframax • Net income of $47.1 million, or $0.23 per basic and diluted share • Adjusted net income of $42.5 million, or $0.21 per basic and diluted share • Declared
Slide 5: Large, diverse fleet of modern tankers
Large, diverse fleet of modern tankers Young, efficient fleet The average TCE ($/day) for VLCCs, Suezmax and LR2s in Q2-2022, demonstrates the advantage of running a fleet with Eco and scrubber ~5 years ~88 % ~65 % Average age ECO vessels Scrubber installed* VLCC $21,100/day premium 30 18 100 compar
Slide 6: Significantly lower costs than Peers
Significantly lower costs than Peers Keeping costs down has always been in Frontline’s DNA Opex* G&A** Finance expense ($ per vessel days) ($ per vessel days) (% of debt) $8,000 $2,500 7.0% $7,600 6.0% $6,000 $2,000 5.0% $1,500 4.0% $4,000 $1,000 3.0% 3.3% $1,100 2.0% $2,000 $500 1.0% $0 $0 0.0% FRO
Slide 7: Cash Breakeven and Cash Generation Potential
Cash Breakeven and Cash Generation Potential Our industry leading cash break even rates are Huge cash generation potential – Free Cash $20.700 on average, even when including dry dock Flow Yield (%) and Free Cash Flow per share ($) costs for six vessels for the remainder of 2022* indicates strong po
Slide 8: Tanker Market: A pivotal point?
Tanker Market A pivotal point? • All asset classes pulling in the same direction • Oil in transit continues to grow, unseasonably high volumes • Invasion of Ukraine – a ton mile story as oil and products are displaced • Highly inefficient trading patterns developing • Asian, and Chinese demand has y
Slide 9: Global Exports
Global Exports Both crude and clean volumes on the rise Global Clean Product Exports Commentary 22,000 • A dramatic change in demand and trading patterns for refined 20,000 products Thousand BBL/Day 18,000 16,000 • Russian product traveled further, but Covid-19 has created a structural change in ref
Slide 10: Major flow changes
Source: Kpler, KBD KBD - 1,000 1,500 2,000 500 2,500 0 500 1000 1500 2000 2500 Jan-16 Apr-16 Jul-16 Oct-16 Jan-17 Apr-17 Jul-17 Oct-17 Jan-18 Apr-18 Jul-18 Oct-18 Major flow changes Jan-19 Apr-19 Jul-19 Oct-19 Russian Exports to Asia Jan-20 Apr-20 Jul-20 Oct-20 Jan-21 Apr-21 Jul-21 Oct-21 Jan-22 Apr
Slide 11: Time-charter Market
Time-charter Market Period markets are on the move 80,000 VLCC -3Y • The time-charter, or period market is an old school bellwether for large oil 70,000 transporters expectations 60,000 50,000 • A three-year commitment is significant, even to an oil major 40,000 • In line with developments in the sp
Slide 12: Tanker Orderbooks
Tanker Orderbooks Orderbooks continue to dwindle on crude 80 VLCC Overall Tanker Orderbook 60 200.00 60.0 40 21 180.00 65 68 50.0 53 58 49 47 49 40 160.00 20 38 39 37 35 27 36 36 29 31 19 28 31 23 21 27 20 140.00 40.0 0 -3 -1 -3 -9 -6 -1 -2 -4 -2 # of vessels -16 -18 -7 -10 -7 Million DWT 120.00 -13
Slide 13: Frontline and Euronav Combination
Frontline and Euronav Combination Next Steps FRO Relocation Filing Bermuda to Cyprus Tender Offer 1.45x FRO shares per 1x EURN share > 75 % 50.1 - 75% Merger Group Frontline gains controlling interest in both scenarios ▪ Combination of complementary platforms to shape a new era of sustainable shippi
Slide 14: Summary
Summary • This is currently a ton-mile story, with sanctions on Russia being the catalyst • Global crude oil exports approaching pre-covid levels, product flows and oil in transit already there ! • Orderbooks continue to dwindle, and no incentives present to invest in new capacity – yet • Are we sta
Slide 15: Questions & Answers
i FRONTLINE Questions & Answers ie
Slide 16: www.frontline.bm
LT FRONTLINE M www.frontline.bm
Slide 17: Income Statement – Highlights
Income Statement – Highlights 2022 2022 2021 (in thousands of $ except per share data) Apr - Jun Jan - Mar Jan - Dec Adjustment items for Q2 2022: Total operating revenues (net of voyage expenses) 159 185 103 790 356 684 • $8.9 million gain on derivatives Other operating gain 264 6 818 5 893 • $6.1
Slide 18: Balance Sheet - Highlights
Balance Sheet - Highlights 2022 2022 2021 (in millions $) Jun 30 Mar 31 Dec 31 Notes Assets Cash 120 111 113 • $351 million in cash and cash equivalents, including undrawn amount of Other current assets 454 245 220 unsecured facility, marketable securities and minimum cash requirements Non-current a
Slide 19: Appendix
Appendix This presentation describes: total operating revenues net of voyage expenses, net income (loss) attributable to the Company adjusted for certain non-cash items ("Net income (loss) adj.") and related per share amounts and Earnings Before Interest, Tax, Depreciation & Amortisation adjusted fo